Car marque Ford is to suspend all advertising activity in the News of the World until parent company News International completes a full investigation of the Milly Dowler phone-hacking allegations.
Along with Ford, utilities firm npower has also stated that it is currently reviewing its advertising with the paper, as more advertisers respond to an increasing public backlash over the incident.
In a statement released by Ford the company said: "Pending the [outcome from the News of the World investigation] we will be using alternative media within and outside News International Group instead of placing Ford advertising in the News of the World."
The majority of advertisers that target the Sunday tabloid are family-oriented brands eager to reach the paper's 7.4 million-strong readership – of which the paper itself states, one-in-five are women with children in the household.
Advertisers in last Sunday's edition included some of the countries biggest advertisers, such as Tesco, Boots, First Choice, BT, Dixons and Dove.
At the time of writing a number advertisers responded to calls made by Brand Republic – Ford, npower, TUI, Morrisons, The Co-operative Bank, Virgin Media and Virgin Holidays – with many playing a waiting game to see if the story escalates, but a number already reviewing their media plans.
Npower said: "We note the concerns which have arisen on the back of fresh allegations of phone hacking against the News of the World. We are currently reviewing our options."
The press office of Virgin Holidays said: "We’re obviously aware of the current allegations regarding the News of the World and are monitoring the story. However, as it is an ongoing investigation, it would be inappropriate for us to comment further at this time."
A spokesman for The Co-operative bank said: "These are allegations. We have no plans to withdraw our advertising" and Virgin Media said it was awaiting the outcome of any investigation before making any decision.
TUI said it had no plans to change its list of advertisers.
Media agencies proved equally reticent in going on the record. "No one will as yet have made a decision," said one media buyer. "But I imagine that brands will steer clear should the scandal escalate and the allegations are proven to be true."
Advertisers do face a tough decision, one agency source said, as the reach and power of the News of the World was so strong, adding that it was "difficult to imagine" a major brand would pull advertising from such a large circulation newspaper. "But we will wait and see how the story unfolds," he added.
The furore has taken the media and blogosphere by storm. Micro-blogging site Twitter is plagued with tweets calling for consumers to boycott brands that advertise in the paper, with members being encouraged to directly target advertisers, and influential mums' blogging site Mumsnet is awash with comments calling for a boycott of News of the World.
Elsewhere, a campaign dubbed Hacked Off is calling for a full public inquiry into phone tapping and has launched an online petition. www.hackinginquiry.org.
Lord Fowler, Lord Cunningham, Chris Bryant MP, Mark Lewis, Adrian Sanders MP, Professor Brian Cathcart, and Martin Moore will officially launch the campaign at the House of Lords tomorrow evening (6 July).
Today News International chief executive Rebekah Brooks, who was editor of News of the World at the time of the alleged hacking, has today promised the "strongest possible action" if claims that the phone of Milly Dowler was hacked are proven, describing the claims as "almost too horrific to believe".
It is alleged that a private investigator working for the News of the World hacked into the voicemail of the murdered girl while she was missing.